U.S. is back, for now, on firmer fiscal ground

New York Times

Updated 12:06 am, Wednesday, January 2, 2013

Photo: Charles Dharapak, Associated Press

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President Barack Obama and Vice President Joe Biden makes a statement regarding the passage of the fiscal cliff bill in the Brady Press Briefing Room at the White House in Washington, Tuesday, Jan. 1, 2013. (AP Photo/Charles Dharapak)

President Barack Obama and Vice President Joe Biden makes a statement regarding the passage of the fiscal cliff bill in the Brady Press Briefing Room at the White House in Washington, Tuesday, Jan. 1, 2013. (AP

President Barack Obama and Vice President Joe Biden make a statement regarding the passage of the fiscal cliff bill in the Brady Press Briefing Room at the White House in Washington, Tuesday, Jan. 1, 2013. (AP Photo/Charles Dharapak)

President Barack Obama and Vice President Joe Biden make a statement regarding the passage of the fiscal cliff bill in the Brady Press Briefing Room at the White House in Washington, Tuesday, Jan. 1, 2013. (AP

President Barack Obama and Vice President Joe Biden walk away from the podium after Obama made a statement regarding the passage of the fiscal cliff bill in the Brady Press Briefing Room at the White House in Washington, Tuesday, Jan. 1, 2013. (AP Photo/Charles Dharapak)

President Barack Obama and Vice President Joe Biden walk away from the podium after Obama made a statement regarding the passage of the fiscal cliff bill in the Brady Press Briefing Room at the White House in

WASHINGTON, DC - JANUARY 01: Members of the House of Representatives, including Rep. Phil Gingrey (R-GA) (L), after voting for legislation to avoid the "fiscal cliff" during a rare New Year's Day session January 1, 2013 in Washington, DC. Voting 257-167, the House passed a bill that the Senate passed the night before, clearing the way for President Barack Obama to sign the legislation to avoid the "fiscal cliff."

WASHINGTON, DC - JANUARY 01: Members of the House of Representatives, including Rep. Phil Gingrey (R-GA) (L), after voting for legislation to avoid the "fiscal cliff" during a rare New Year's Day session

WASHINGTON — After a day of wrangling, the House approved a major fiscal agreement Tuesday night that already had cleared the Senate.

The legislation, which President Barack Obama and a bipartisan Senate majority agreed was necessary to prevent the nation from slipping back into recession, was approved 257-167.

Speaking later at the White House, the president acknowledged more needed to be done to reduce the nation's deficit, but added that leaders “can't simply cut our way to prosperity.”

And looking toward a looming battle on Capitol Hill — raising the government's debt limit — Obama warned lawmakers that they were responsible for paying the “bills” that already have been run up by Congress.

Faced with the prospect of being blamed for pushing the country over the “fiscal cliff,” the House GOP leadership had spent the day Tuesday touting the Senate proposal, despite deep objections from rank-and-file Republicans.

The House Republican leaders took the temperature of their fractious caucus and tried to plot a way forward.

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Much of the day was spent exploring the possibility of adding spending cuts to the measure and returning it to the Senate, but the leadership abandoned that strategy Tuesday evening.

Several Republicans said that increasingly, the realization that the Senate wouldn't take up their amended bill made the up-or-down vote all but inevitable at some point or the blame would rest in the House.

“That puts us in a tough spot if they don't take it up,” said Rep. Richard Nugent, R-Fla. “You can be right and you can be dead right.”

Failure would have meant the nation would go deeper into the tax increases that technically went into effect New Year's Day.

Backers of the measure had hoped a quick resolution in the House would limit any economic harm.

The dynamic with the House was a near mirror image of a fight at the end of 2011 over a payroll tax break extension. In that showdown, Senate Democrats and Republicans passed legislation, House Republicans fumed over it but eventually were forced to swallow it.

But as they got a detailed look at the Senate's fiscal legislation, House Republicans voiced serious reservations about the measure that would allow taxes to go up on household income over $400,000 for individuals and $450,000 for couples.

They emerged from a lunchtime New Year's Day meeting with their Republican leaders, eyes flashing and faces grim.

One by one the lawmakers declared they would not brook a bill with tax increases for wealthy Americans without substantial savings from cuts.

The unrest reached to the highest levels as Rep. Eric Cantor of Virginia, the House majority leader, told members in a closed-door meeting in the basement of the Capitol that he could not support the legislation in its current form.

House Speaker John Boehner, who faces re-election to his post Thursday as the 113th Congress convenes, had grave reservations as well, though he earlier had pledged to allow the House to consider any legislation that cleared the Senate.

Boehner, though, wasn't eager to have such a major piece of legislation pass with mainly opposition votes, an outcome that could undermine his authority.

Adding to the pressure on the House, the deal had been cut by Sen. Mitch McConnell of Kentucky, the Senate Republican leader, and had deep Republican support in the Senate, isolating the House Republicans in their opposition.

Some of the Senate Republicans who backed the bill were staunch conservatives with deep credibility among House Republicans.

The options before the House Republicans were fraught with risks.

Senate Democrats said they would not brook any serious amendments to their bill — one hard fought and passed in the dark of night with many pairs of clenched teeth on both sides of the aisle.

Senate Democratic leaders said they planned no more votes before the new Congress convenes Thursday afternoon.

The up-or-down House vote on the presented many Republicans with a nearly impossible choice: to end the standoff that most Americans wished to see cease, or to vote to allow taxes to go up on wealthy Americans without any of the changes to spending and entitlement programs they have vigorously fought for the better part of two years.

“I have read the bill and can't find the spending cuts — even with an electron magnifying glass,” said Rep. Trey Gowdy, R-S.C., who generally votes against budget bills.

“It's part medicinal, part placebo and part treating the symptoms but not the underlying pathology.”

A failure to pass any measure before the 112th Congress ends would have required the process to start over in the new 113th Congress.

That would have meant the Senate would have had to vote again with a changed membership due to the departure of several veteran lawmakers and the arrival of newcomers from both parties as a result of victories in the November elections.

Democrats had their own problems with the measure but they emerged from their own closed-door meeting with Vice President Joe Biden, who had negotiated the pact, resigned to the deal if not ecstatic about it.

As he did with Senate Democrats the night before, Biden walked House members step-by-step through the negotiations, the legislation and the path forward on future deficit confrontations.

“It is clear that the vice president and the president are convinced that they have done the right thing. They don't see it as a perfect deal though, and nobody else does,” said Rep. Elijah Cummings, D-Md.